- Start date: 1 February 2019
- End date: 31 August 2020
- Principal investigator: Dr Surender Munjal and Dr Mohammad Faisal Ahammad
Does Brexit (and the likelihood of leaving the EU single market without a deal) remind the UK of the importance of its old friend in the Commonwealth?
Policy makers in the UK and in the other Commonwealth countries (CWCs) find this question become increasingly important as the UK is getting closer to Brexit. Plethora of business and political news is full of various estimates that suggest how badly the UK economy will suffer as a consequence of coming out of Brexit. The academic wisdom in the field of economics and international business also suggest that economic alliances between countries, in the form of bilateral treaties, regional trade agreements, and custom unions, offer various advantages to its member states. Thus, while it is true that the UK economy will take a hit in the short-run, but it is likely that the economic forces, with the help of new and old political allies, will find a new equilibrium in the due course. One of the possible solutions on board relates to enhancing trade and investment cooperation with the CWCs. The UK, with the Queen Elizabeth being the head of Commonwealth, has an inherent advantage in leading such an initiative.
According to the House of Commons report (2019), the UK recorded a trade surplus of £7.0 billion with the Commonwealth in 2017 (export £56.3 billion and import £49.3 billion). While the current volume of trade is very small it is important to note that there is a potential to grow these volumes exponentially. Realising the economic advantages accruable to the member states, the trade and commerce ministers of CWCs have already pledged to harness trade advantages offered by the Commonwealth (CW, 2017). Thus, the first proposition (P1) that we aim to put forward relates to investigating how far the expected economic losses to be incurred by the UK can be compensated by enhanced economic cooperation with the Commonwealth?
According to the Commonwealth.org (2019), “there is a 19 per cent trade advantage within the Commonwealth … and we must see how the global trade landscape can be changed in favour of that advantage and the particular factors that drive and differentiate intra-Commonwealth trade and investment be improved.” Source: http://thecommonwealth.org/media/press-release/trade-ministers-pledge-harness-commonwealth-advantage-historic-meeting
The overarching aim of this project is to investigate the impact of the Commonwealth on Global Value Chains (GVCs) and internationalisation of Multinational Enterprises.
More specifically, it seeks to:
a) identify the potential pitfalls for the UK businesses due to Brexit and the possibilities of mitigating the losses by focusing business towards the Commonwealth;
b) map the participation of the Commonwealth Countries (CWCs) in the global value chains;
c) identify the value chains that are sustainable with intra-Commonwealth trade;
d) present a case to argue for the internalisation of those segments of value chains that can be served within but are presently located outside the CWCs; and
e) locate the opportunities for internationalisation of businesses in CWCs.
Publications and outputs
Global value chains and the Commonwealth, Research & Innovation Blog